Valley Club to file for Chapter 7 in wake of discrimination fight, revenue shortfall
THE SUBJECT LINE on the e-mail simply reads, “The End.”
As in, the end of the Valley Club, the small, sleepy Huntingdon Valley community pool that was thrust into the national spotlight this past summer, allegedly for discriminating against minority campers who’d signed up to swim there for 90 minutes each week.
Yesterday, Valley president John Duesler announced that the club’s board of directors had voted 5-1 to file this week for Chapter 7 bankruptcy.
For months, it had been rumored that Valley would not survive the costs associated with legal proceedings and lawsuits filed on behalf of young campers from Creative Steps Day Camp, a city summer camp whose members are minorities.
Campers’ families alleged that their children’s pool privileges had been revoked because the club’s overwhelmingly white members didn’t want children of color at the small, suburban club.
However, in an e-mail yesterday addressed to club “friends and families” announcing the bankruptcy, Duesler said that legal costs were only partly to blame for the club’s financial woes.
“While many will point towards our legal situation and negative media exposure this summer as the reason” for the bankruptcy filing, “the truth is that the club has struggled to stay out of the red for at least the last decade,” he wrote.
“Despite our most ambitious efforts and countless hours of dedication towards the club, we have been unable to grow our membership enough to sustain The Valley Club any longer. Indeed, we have not been profitable, for as long as I’ve been with the club. And our current debt from this year’s operation and legal fees now exceeds $100,000.”
Combining that “business fact with legal proceedings,” he said, Valley’s board sought advice from the club’s bondholders about how to steer the club’s future.
“With nearly 400 letters mailed to our current bond-holders, and less than 50 returned, apathy was clearly the tone that won the day,” he wrote. ” . . . We have also emailed . . . last year’s members, and have understandably received a collective shrug of the shoulders . . . we are all tired and beaten down and just sickened by how our club has been improperly portrayed. After speaking to many members, my sense is that mostly everyone wants to move on.”
My call to Duesler’s home yesterday was answered by a woman who said that the bankruptcy filing “had not happened yet.” Asked additional questions about Duesler’s e-mail, she said, “We have no comment.”
Alethea Wright, founder and director of Creative Steps, could not be reached for comment yesterday. But Brian Mildenberg, who is representing two families in a class-action lawsuit against the Valley, said the bankruptcy filing would temporarily freeze civil litigation against Valley. But it would not affect ongoing proceedings by the Pennsylvania Human Relations Commission, which concluded, in a report released in September, that racial discrimination had occurred at the club.
“It appears that Valley is dissolving themselves as an entity,” Mildenberg said. “Whatever monies are left over after the possible sale of their property would be used to pay creditors,” including any of the children and families who are successful in their claims against the club.
Mildenberg speculated that Valley’s 10-acre property is worth $2 million to $3 million.
In his e-mail to members, Duesler had expressed hope that the land could be somehow maintained for community use.
“We have, and continue to, work with the Lower Moreland township to see if there is anyway that they could help maintain the land as a resource for our community,” he wrote. “That has yet to be determined, as the township, like so many local governments around the nation, are facing incredible fiscal challenges that do not leave much wiggle-room for pop-up opportunities, such as this.”
News of the bankruptcy saddened many Valley families, said one club member, who spoke on condition of anonymity because he didn’t want to cause more heartache to anyone harmed by the controversy.
“It’s sad,” he said. “Most of the members had no idea” what had transpired between Valley and Creative Steps until well after the fact.
“I just feel so bad that it’s all come to this.”